Why Italy Should Not Prioritize Anticorruption in Spending Covid Recovery Funds

The Covid-19 pandemic has been an economic disaster as well as a public health disaster, and massive public spending will be needed to promote recovery. In Europe, the EU is projected to spend up to €1.8 trillion on pandemic recovery. One of the biggest recipients of these EU funds will be Italy, the EU’s hardest-hit member state. Currently, Italy is poised to receive €123 billion in loans and €69 billion in grants between now and 2026. Provision of these funds has already started; the first tranche of €25 billion arrived this past June. This funding will support Italy’s Covid recovery plan, known as the Piano Nazionale di Ripresa e Resilienza (PNRR), which—in the name of territorial cohesion—will allocate 40% of the funds to the Italian south.

If history is any guide, a massive amount of that money will be misallocated, misspent, or outright stolen by corrupt public officials colluding with organized crime groups. The mafias have a long history of bribing Italian officials for lucrative public contracts. Between 2014 and 2020, Italy received €77 billion from the EU for use in structural and investment funds; 60% of those funds were “fraudulently requested or obtained,” often by organized crime, with the 85% of that fraud occurring in the South. Much of the fraud occurs when illegitimate companies request funds in the form of loans and grants; the companies either don’t exist or are liquidated upon receipt of the funds.  

But we needn’t look only to history: Italy’s three most powerful crime syndicates—Cosa Nostra in Sicily, the Camorra in Campania, and the ‘Ndrangheta in Calabria—are already bribing Covid response officials, winning fraudulent contracts, and plundering businesses in receipt of PNRR funds. As the EU money pours in, we can expect that these mafia groups will use their corrupt networks to siphon off a staggering percentage of the EU Covid relief funding.

What should European policymakers do in response? It’s tempting to insist—as anticorruption activists have in this and other contexts—that the EU and Prime Minister Mario Draghi’s government adopt enhanced oversight and transparency measures, to better ensure that funds are spent appropriately. But that would be a mistake. Right now, the priority must be on promoting a swift economic recovery. Attaching burdensome anticorruption requirements to the public spending needed to support that recovery will slow the process down too much. This is, I realize, a bitter pill to swallow. Many readers will instinctively resist the idea that the EU and the Italian government might bankroll Italy’s most powerful mafias (to the tune of up to €200 billion). But if Italy is to recover from the economic effects of the Covid-19 pandemic, the priority must be the swift delivery of recovery funds, even if this means that much of the money will be intercepted by the mafia.

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Municipal Dissolution as a Means of Combatting Criminal Corruption

In December of 2019, the Italian government dissolved the municipal government of the Calabrian town of Africo, replacing it with a national governmentk commission that would run the city for the next 12 to 24 months. This drastic action, decried by (former) Africo city councilor Nicola Paris as “interrupting democracy,” was authorized by a special Italian law, adopted in 1991, that permits the national government to dissolve a local government if that local government has been infiltrated by the mafia. Since 1991, 341 such dissolution decrees have been issued (though 21 were cancelled by administrative courts), with 22 issued in 2019-2020 alone. Sixty-six communities have seen their local government dissolved more than once. (Africo’s city council, for example, has now been dissolved three times.) And the practice is spreading geographically. Between 1991 and 2011, the vast majority of city council dissolutions were in the three regions under the “traditional” sphere of mafia control (Campania, Calabria, and Sicily), with only three dissolutions outside of those regions. But since 2011, the Italian government has dissolved city councils in 21 municipalities outside of that traditional sphere.

The dissolution of city councils is a serious measure, and is strictly regulated. The process begins when concrete evidence emerges of links between town councilors and organized criminal elements that could bias political decision-making or affect public security. This evidence is submitted to the Prefecture, an administrative body responsible for implementing state functions at the local level. The Prefecture appoints a three-person Committee of Inquiry. After an investigation, which usually takes roughly 3-6 months, the Committee presents its findings to the Prefect, who presents them to the Minister of Interior within 45 days. The Minister of Interior, after deliberating with the Council of Ministers, then decides whether to issue a proposal of dissolution; a dissolution is only finalized when the President of the Republic issues a decree of resolution. The issuance of such a decree is judicially reviewable by the administrative courts (and, as noted above, 21 dissolution orders have been judicially nullified). When a municipal government is dissolved, the mayor, councilors, and members of the executive committee are removed from office, and a group of three individuals, known as the Extraordinary Commission, takes over all council activities for a period of up to two years. At the end of this time, new local elections are held.

Even with all of this process, dissolution of a local government is an extreme measure, but in Italy, where deeply-entrenched organized criminal groups are able to secure their control thorough corruption of local governments, such an extreme response is warranted. Indeed, other countries struggling with similar problems might consider adopting a similar mechanism. Continue reading

Italy’s Mafia Corruption Laws Are Causing More Confusion than Clarity

Italy has a long history with organized crime, and that history has had a fundamental impact on the country’s experience with corruption. Italy has three traditional mafia associations (the Camorra of Campania, the ‘Ndrangheta of Calabria, and Sicily’s Cosa Nostra), along with a number of smaller groups. For decades, these groups have secured their power not only by exercising violence against local populations, but also by their ability to influence politicians. Historically, it has been common for politicians in mafia-dominated regions to engage directly with the criminal groups, for instance by exchanging lucrative public works contracts for vote mobilization (for example, see here and here).

In the 1980s and 1990s, following an explosion of mafia-related violence, the Italian government began to crack down on organized crime, and this crackdown included new measures that targeted the criminals’ political benefactors. In 1982, the parliament passed Article 416-bis c.p., which defined for the first time the crime of “mafia-type association” (associazione di tipo mafioso). With the passage of this law, anyone who was found to be a member of a mafia-type association could be punished with 10-15 years in prison. In order to be considered a mafia-type association, the group has to follow the mafia method—that is, the use of 1) the force of group intimidation; 2) subjugation; and 3) the code of silence (omertà)—to commit crimes. In recognition of the importance of political alliances for mafia crimes, the procurement of votes is explicitly mentioned in the law as a possible mafia activity. In 1992, the law was amended to more directly target mafiosi’s political allies by criminalizing a rather narrow set of corrupt relationships. In particular, the law specified that politicians who worked with mafia groups by exchanging vote procurement for money would be subject to 7-12 years imprisonment. This amendment (denoted 416-ter) was subsequently reformed in 2014 and again in May 2019, with the result that the culpable conduct for politicians was expanded to include the exchange of votes for money or other benefits. This change reflects the reality that politicians rarely give money directly to mafia contacts but are more likely to provide other benefits, such as securing government contracts or providing jobs.

However, this regime was deemed insufficient, as most government officials are not actually members of mafia groups, and there are many ways in which mafias may benefit officials that do not involve elections. For instance, one might imagine a magistrate who consistently provides favorable rulings for mafia defendants, or a police officer who provides information about ongoing investigations in exchange for money or other benefits. To address these gaps, Italian courts have developed the concept of concorso esterno (external participation). Concorso esterno is not a separate crime in the Italian criminal code, but rather a concept that courts have derived from the combination of Article 416-bis and Article 110 c.p., the provision that establishes that when more than one person is complicit in a crime, each is subject to the same punishment for that crime. Italian courts have reasoned that the conjunction of these two provisions implies that prosecutors may charge individuals who support mafia actors—including politicians and other government officials—almost as if they were mafiosi themselves, and those convicted may be subject to the harsh sentences that await convicted mafiosi.

The concorso esterno regime reduces the ability of corrupt officials to avoid prosecution, and empowers Italian law enforcement to target the political corruption that has undergirded mafia activity. Where the law is used effectively against high-level politicians, it may also help to combat the public perception that politicians who work with the mafia groups enjoy impunity. Moreover, by labeling politicians and other “non-mafia” criminal associates as functionally equivalent to mafiosi themselves, this approach sends a powerful symbolic message, one that is appropriate given the historic symbiosis between politicians and organized crime in Italy. Nevertheless, the concorso esterno theory, which has long been controversial in Italian legal scholarship (for example, see here and here), has some very real downsides.

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